29 Oktober 2015

[291015.EN.SEA] Colombo Emerges As South Asia's Next Major Transshipment Port

SRI Lanka's port of
Colombo has
emerged as a growing transshipment hub capable of handling the increasing
number of mega-ships that have become the workhorses of the Asia-Europe trade.

Colombo International
Container Terminals (CICT)
became a major player in September when CMA CGM Marco Polo - until 2013 the
world's largest container ship with a capacity of 16,020 TEU - arrived at
the facility, shaking off years of miniscule container growth.

The 2.4-million-TEU
deep-sea terminal
is a joint venture between China Merchants Holdings International and
the Sri Lanka Ports Authority, and the rise of major shipping
alliances, or more integrated and expansive vessel-sharing agreements, has
boosted traffic at Colombo and other Asia transshipment hubs.

Those hubs
are benefiting from the inability of other nations on the Indian subcontinent
to handle vessels with capacities of 10,000 TEU and up - and the massive
volumes they discharge into the hinterland, the IHS Media reported.

Colombo,
particularly, has reaped the benefits of being at the nexus of the South Asia
trade, a position that forces it to balance relations with India, its much
larger neighbour, while still benefiting from terminal investment and trade
fuelled by China, Asia's other heavy hitter.

CICT's
increase in volume has been staggering. In 2014, its first full year of
operation, the terminal handled slightly more than 686,600 TEU and expects to
double that this year to about 1.3 million TEU. Colombo, consisting of three
container terminals, is expected to boost volume 5 to 10 per cent this year
over 2014, Upul Jayatissa, chief manager of marketing and business development,
said.

Total box volume in
Colombo container volume grew 14 per cent year over year in 2014 to 4.9 million
TEU, elevating
Colombo three spots, to 30th, on The Journal of Commerce's ranking of global
container ports.

In the prior
four years, Colombo had a compound annual growth rate of 1 per cent.
Transshipment cargo to and from India, east Africa and Bangladesh accounts for
approximately 70 per cent of the port's volume, according to the Asian
Development Bank. The remaining 30 per cent is local traffic, driven by
garment, tea and rubber exports, and consumer products, and industrial and
agricultural equipment imports.

The port has
an annual capacity of 7.4 million TEU, but the addition of two new planned
terminals, each with annual capacities of 2.4 million TEU, in the South
Harbour, where CITC is located, would bring its capacity to 12.2 million TEU.
Another 1 million TEU of capacity or so could be squeezed out by maximizing the
terminals, estimates Rohan Masakorala, CEO of Shippers' Academy Colombo, a
school of business for global commerce and logistics. Another 800,000 TEU of
capacity will be added in 2016, when the US$500 million East Terminal comes
online.

The
terminal's 59-foot draft and cranes with a 230-foot outreach allow it to handle
the largest container vessels in service, giving the port a chance to stay
competitive in a transshipment market plied by increasingly larger vessels.
Fourteen services using mega-ships call CICT weekly, providing about 65 per
cent of the volume, with feeder traffic providing the rest.

The terminal
receives more than 100 ship calls a month, with the 2M Alliance of Maersk Line
and MSC, the two largest global carriers, driving the most volume.
Singapore-based Pacific International Lines is the second-largest user of the
terminal, followed by the CKYHE and G6 alliances.

The Asian
Development Bank, which gave a $300 million loan to Colombo for harbour
improvements, is optimistic about the port's potential, noting most ports in
South Asia face congestion.

Demand for
Colombo transshipment appears to be growing in India. The volume of
transshipped goods moving through Colombo for India's major public ports nearly
doubled from 652,000 TEU in the fiscal year ending March 31, 2014, to nearly
1.2 million during fiscal 2014-15, according to statistics obtained from
India's Ministry of Shipping. Total foreign transshipped volume through India's
major ports soared 34 per cent to 2.5 million TEU in the same period.

Colombo
commanded the largest share of India's foreign transshipment volume in the
latest fiscal year, accounting for 48 per cent of all traffic, according to
ministry statistics. Singapore was the second-largest gateway for foreign
transshipped cargo to India, with a 22 per cent share, and Port Klang,
Malaysia, was third, with a 10 per cent share.

CICT also
handled 220,000 TEU moving to and from Bangladesh this year, up 40 per cent
from 2014. Of the 1.6 million oceangoing TEU moving through Bangladesh
annually, CICT aims to add 800,000 over the next two years.